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Assiez
I've been thinking of starting up a small company. However I have never done anything like it or know anyone who has, so I don't exactly know the procedure that one should follow. Another problem is that I'm still a minor so I can't legally sign forms yet.

Basically what I'm asking is that if you're in America and started a very small company, do you need to register it? When does taxes start coming into play? And if you're a lawyer, what hurdles or problems could a small web design company face?

Thanks.
alkady
I'm in the same boat as you, Except I'm a step ahead. I plan to start a business in 1 and a half years when I finally reach my majority. Plus I've studied business since the age of 10. So over 6 years of book experience.

What I can say is Yes you have to register your business unless your using your name. So eg. Your name is Arnold Sims, Legally you dont have to register "The Arnold Sims Company", But If it was to say "Sims and Associates", You most likely will. Its an issue that is diferrent from each states.

Taxes come into play the next year on the day you founded your company. But thats obvious not the same everywhere. But thats how I learned it from the books.

The problems a web design company could face is very limited. Since there isnt much financial risk unless you plan to hire. Your on a good start. It may take time to build customers, But other than that, There isnt much paperwork.

So good luck with your business, If you need more help then PM me, I may not be a business advisor or anything but I taking business course, So I should be up to the level soon.
dz9c
I have nothing to say on the subject but I would like to say good luck to you both in your business.
jayandsilo
You will have to register it, don't take a chance and not, can get you into alot of trouble
robdoar
As far as taxes go, as long as you are making less then $3000 a year, you can count it as freelance income. Taxes on it are not bad at all. If you are making more then that, there are some self-employment things that you have to work out. But, being as you are a minor, you are able to work "under the table" as it were, without much fear from the IRS. Good luck in your endevours.

I run a web design company myself, and would be happy to help you out, if ya need it.
alkady
Also I forgot to mention, When running a business, You will have to fill alot of paperwork and I dont just mean tax return. What Im trying to say is that since you live in the USA, "You" as the owner are considered a "Tax Deputy" and will have to act as the Tax Representative for your company.

In other words, You have to withhold a certain amount of your paycheck "If Any" for the Income Tax and so on it goes Tax. Sucks doesnt it? Well thats how it is.
Assiez
Thanks for all your replies. They've been extreamly helpful.

To get around the problem of needing an adult to sign papers, I might have one of my parents register the name as a cofounder.
alkady
Assiez wrote:
Thanks for all your replies. They've been extreamly helpful.

To get around the problem of needing an adult to sign papers, I might have one of my parents register the name as a cofounder.


Technically speaking, Your parents would be recognized as the founder by the Government. Plus if you actually do convince your parents into founding it for you. You lucky person. I'm trying to get a comic syndicated which is currently in work, And even successful my parents may not fill the paper work.
Kael
Let me set a few things straight. First of all, I am an Enrolled Agent and have been doing taxes PROFESSIONALLY for several years. I also own my own software company.

1. You do NOT have to 'register' it. Depending on the type of business you have you may choose to get a business license.
2. You do not have to withhold a certain ammount of your paycheck and you do not have to 'pay youself' any certain ammount. What you will need to do is make sure that you can afford to pay taxes on any taxable income that you receive. This is tricky.

If you are going to make a profit, and it is going to be enough after legel deductions to be considered taxable income, you will have to pay self-employment tax. Self-employmet tax covers the ammounts that an employer would have paid, on your behalf, for social security tax and medicare tax. On top of that you have to pay taxes on whatever is considered taxable income.

The upside is that there are many deductions that you can take to reduce your taxable income, many of which I have even seen CPA's miss. So make sure that you have a good tax person. I've had do ammended returns for a LOT of returns tah were prepared by a CPA simply because CPA's, while good with balancing your finances, are NOT specialized in Tax knowledge.

Trust me on this. I've been doing taxes and managing the #1 office in my state for the #2 tax company in the nation (only #2 because H&R Block has been around for so long) for 3 years .. I know my stuff.

If you have any further tax questions, feel free to email me Wink
alkady
Kael wrote:
Let me set a few things straight. First of all, I am an Enrolled Agent and have been doing taxes PROFESSIONALLY for several years. I also own my own software company.

1. You do NOT have to 'register' it. Depending on the type of business you have you may choose to get a business license.
2. You do not have to withhold a certain ammount of your paycheck and you do not have to 'pay youself' any certain ammount. What you will need to do is make sure that you can afford to pay taxes on any taxable income that you receive. This is tricky.

If you are going to make a profit, and it is going to be enough after legel deductions to be considered taxable income, you will have to pay self-employment tax. Self-employmet tax covers the ammounts that an employer would have paid, on your behalf, for social security tax and medicare tax. On top of that you have to pay taxes on whatever is considered taxable income.

The upside is that there are many deductions that you can take to reduce your taxable income, many of which I have even seen CPA's miss. So make sure that you have a good tax person. I've had do ammended returns for a LOT of returns tah were prepared by a CPA simply because CPA's, while good with balancing your finances, are NOT specialized in Tax knowledge.

Trust me on this. I've been doing taxes and managing the #1 office in my state for the #2 tax company in the nation (only #2 because H&R Block has been around for so long) for 3 years .. I know my stuff.

If you have any further tax questions, feel free to email me Wink


Thats what I meant by withhold, I perhaps havent made it clear.
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